The news June 23 that Infor chose Microsoft (MSFT) technology on which to base its next generation of enterprise applications is interesting to IT investment research on multiple levels. Unfortunately, here in Massachusetts, the news is competing with the Red Hat (RHAT)/JBoss User Conference and the first days of summer. So subject to a deeper look, here's my first take:
Who's Infor again?
It's a privately held top-10 enterprise applications supplier just waiting for the recovery of the economy and stock market to go public again. Depending on how one defines ERP, Infor is probably fifth in ERP behind only SAP, Oracle, Intuit and Sage. I must admit at least once a year I have a lot of fun with Infor listing the 30 something enterprise application suppliers it has acquired in order to make that top-10 claim true but a handful of the 30-plus acquisitions include the seedlings of the enterprise software and ERP market: MAPICS (the IBM product that was the granddaddy of all ERP), Marcam, SSA, Software 2000 (later Infinium after Y2K didn't matter), JBA and the various other products that made up Geac, and Baan.
What does this mean for IBM?
Here's where it gets interesting. With the exception of Baan in the list above, all these legacy products were based on the IBM AS/400 (including predecessors and successors) technology. I would think Infor's choice of Microsoft Sharepoint, Silverlight and other middleware was the result of a technology shoot out between Microsoft and IBM Websphere products, similar to the shootout at Peoplesoft in 2002, a shoot out that became moot when Oracle stepped in and acquired the former leader in human relations management software. Is this event that I have hypothesized about for 10 years? Is this the trigger that forces IBM back into the ERP market in self defense. And if so, maybe those IBM buys Lawson (LAWS) rumors start to look more reasonable.
What does this mean for Microsoft itself?
A year ago I suggested Steve Ballmer sell his "ERP business unit" to Infor. OK, it could work the other way too. But this new status quo means Microsoft will be competing against itself among medium-sized enterprises, the core of Infor's customer base. That approach didn't work out well for General Motors and I don't like it in the information technology business either. But on the plus side, it's another ringing endorsement for Sharepoint, as if it needed any help.
-- Dennis Byron
(no financial interest in companies mentioned except for $12 a year I pay Microsoft)
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